The Effect of Location Attractiveness on Investment Decisions of Firms: Evidence from Top-Managers

Last registered on May 13, 2024
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Pre-Trial

Trial Information

General Information

Title
The Effect of Location Attractiveness on Investment Decisions of Firms: Evidence from Top-Managers
RCT ID
AEARCTR-0013576
Initial registration date
May 12, 2024

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
May 13, 2024, 12:43 PM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country
Germany
Region

Primary Investigator

Name
Philipp Heil
Affiliation
ifo Institute
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Other Primary Investigator(s)

PI Name
Niklas Potrafke
PI Affiliation
ifo Institute
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PI Name
Klaus Gründler
PI Affiliation
ifo Institute / University of Kassel
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PI Name
Ramona Schmid
PI Affiliation
ifo Institute
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PI Name
Luisa Dörr
PI Affiliation
ifo Institute
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Additional Trial Information

Status
In development
Start date
2024-05-13
End date
2024-05-27
Keywords
Finance & Microfinance, Firms & Productivity, Governance
Additional Keywords
JEL code(s)
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
The attractiveness for doing business has been shown to correlate closely with economic growth, but little is known about the extent to which the attractiveness of locations causally impacts investment decisions of firms. We design a survey experiment using a high-quality sample of managers having leadership positions at German firms to identify the causal effect of the attractiveness of firm locations on investment decisions of top managers. We exogenously shift managers' assessments about the attractiveness of Germany as a business location by informing a randomly chosen subset of managers about positive or negative expert assessments. Those assessments were previously elicited in a large-scale expert survey on global business locations. We use the causal shift of manager perceptions as a first stage, and then measure the causal effect of this shift on investment decisions in a second stage. Our results will deliver important policy implications, helping to quantify the extent to which business locations impact firm decisions.
External Link(s)

Registration Citation

Citation
Dörr, Luisa et al. 2024. "The Effect of Location Attractiveness on Investment Decisions of Firms: Evidence from Top-Managers." AEA RCT Registry. May 13. https://doi.org/10.1257/rct.13576-1.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
We measure firms' perception of Germany's attractiveness as a business location. By shifting these perceptions with varying additional information in the form of previously collected expert assessments, we estimate the causal effect of those perceptions on firms' investment decisions.
Intervention Start Date
2024-05-13
Intervention End Date
2024-05-27

Primary Outcomes

Primary Outcomes (end points)
Primary outcomes in our study are investment intentions and investment plans.
Primary Outcomes (explanation)
Secondary outcomes are policy preferences.

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Survey Respondents are subject to one varying treatment intervention. One group receives the assessment of Germany's attractiveness as a business location from optimistic experts, and the other group from pessimistic experts. Participants are randomized into one of the two treatment arms.
Experimental Design Details
Randomization Method
Randomization is conducted using the built-in tool from the survey software.
Randomization Unit
Individual
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
400
Sample size: planned number of observations
400
Sample size (or number of clusters) by treatment arms
200 Treatment Optimist, 200 Treatment Pessimist
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number
Analysis Plan

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials